Lands Eight New FST Accounts, Representing
Potential Terminal Sales of Nearly 1,000 Units
Casino and Gaming Sales Begin Normalization
TransAct Technologies Incorporated (Nasdaq: TACT) (“TransAct” or
the “Company”), a global leader in software-driven technology and
printing solutions for high-growth markets, today reported
preliminary results for the first quarter ended March 31, 2024.
“We have continued confidence in our core product offerings and
our ability to win new customers in new deployment situations
across a number of verticals, with eight new logos added to our
BOHA! platform in the quarter,” said John Dillon, Chief Executive
Officer of TransAct. “We are optimistic about the future of
TransAct as an agile, transaction validation platform providing
tailored solutions to our customers and believe there is
significant opportunity in both the near and long-term to target
new use cases with our existing products and to enter new markets
further down the road.”
First Quarter 2024 Financial Highlights
- Net Sales: Net sales for the first quarter of 2024 were
$10.7 million, down as expected due to the pull back in Casino and
Gaming. The results were down 52% compared to $22.3 million for the
first quarter of 2023 largely as a result of the expected market
dynamics and normalizing demand for our Casino and Gaming
printers.
- FST Recurring Revenue: FST recurring revenue for the
first quarter of 2024 was $2.4 million, up 3% compared to $2.3
million for the first quarter of 2023.
- Gross Profit: Gross profit for the first quarter of 2024
was $5.6 million, resulting in gross margin of 52.6%, compared to
gross profit of $12.3 million for the first quarter of 2023, which
delivered a 55.0% gross margin.
- Operating (loss) income: Operating loss for the first
quarter of 2024 was $(1.3) million, compared to operating income of
$3.8 million for the first quarter of 2023.
- Net (loss) income: Net loss for the first quarter of
2024 was $(1.0) million, or $(0.10) per diluted share, based on
10.0 million weighted average common shares outstanding. Net income
for the comparable 2023 period was $3.1 million, or $0.31 per
diluted share, based on 10.0 million weighted average common shares
outstanding.
- EBITDA: EBITDA was negative $966 thousand for the first
quarter of 2024, compared to $4.2 million for the first quarter of
2023.
- Adjusted EBITDA: Adjusted EBITDA was negative $701
thousand for the first quarter of 2024, compared to $4.5 million
for the first quarter of 2023.
2024 Financial Outlook
- Total Net Sales: The Company currently expects full year
2024 total net sales of between $45 million and $50 million.
- Total Adjusted EBITDA: The Company currently expects
full year 2024 total adjusted EBITDA to be between negative $2.5
million and negative $3.5 million.
Our outlook for non-GAAP adjusted EBITDA is presented only on a
non-GAAP basis because not all of the information necessary for a
quantitative reconciliation of this forward-looking non-GAAP
financial measure to the most directly comparable GAAP financial
measure is available without unreasonable effort, primarily due to
uncertainties relating to the occurrence or amount of these
adjustments that may arise in the future. If one or more of the
currently unavailable items is applicable, some items could be
material, individually or in the aggregate, to GAAP reported
results.
2024 First Quarter Conference Call and Webcast
TransAct is hosting a conference call and webcast today, May 7,
2024, beginning at 8:30 a.m. ET to discuss the Company’s
preliminary first quarter 2024 results and other matters. Both the
call and the webcast are open to the general public. The conference
call number is 877-704-4453 and the conference ID number is
13746173 (domestic or international). Please call ten minutes prior
to the presentation to ensure that you are connected.
Interested parties may also access the conference call live on
the Internet at www.transact-tech.com (select “Company” followed by
“Investor Relations” followed by “Events & Presentations”).
Approximately two hours after the call has concluded, an archived
version of the webcast will be available for replay at the same
location.
Non-GAAP Financial Measures
TransAct is providing certain non-GAAP financial measures
because the Company believes that these measures are helpful to
investors and others in assessing the ongoing nature of what the
Company’s management views as TransAct’s core operations. EBITDA
and adjusted EBITDA provide the Company with an understanding of
one aspect of earnings before the impact of investing and financing
charges and income taxes. The Company believes that these non-GAAP
financial measures provide relevant and useful information to an
investor evaluating the Company’s operating performance because
these measures are: (i) widely used by investors to measure a
company’s operating performance without regard to items that do not
reflect the Company’s ongoing operations and are excluded from the
calculation of such measures; (ii) used as financial measurements
by lenders and other parties to evaluate creditworthiness; and
(iii) used by the Company’s management for various purposes
including strategic planning and forecasting and assessing
financial performance. The presentation of this non-GAAP
information is not considered superior to or a substitute for, and
should be read in conjunction with, the financial information
prepared in accordance with GAAP.
EBITDA is defined as net (loss) income before net interest
expense, income taxes, depreciation, and amortization. A
reconciliation of EBITDA to net (loss) income, the most comparable
GAAP financial measure, can be found attached to this release.
Adjusted EBITDA is defined as net (loss) income before net
interest (income) expense, income taxes, depreciation and
amortization and is adjusted for (1) share-based compensation and
(2) any other items, when they occur, that we believe do not
reflect the ordinary earnings of the Company’s ongoing business.
The Company adjusts EBITDA for share-based compensation because the
Company considers share-based compensation to be a non-cash expense
similar to depreciation and amortization. A reconciliation of
adjusted EBITDA to net (loss) income, the most comparable GAAP
financial measure, can be found attached to this release.
About TransAct Technologies Incorporated
TransAct Technologies Incorporated is a global leader in
developing and selling software-driven technology and printing
solutions for high-growth markets including food service, casino
and gaming, and POS automation. The Company’s solutions are
designed from the ground up based on customer requirements and are
sold under the BOHA!™, AccuDate™, EPICENTRAL®, Epic and Ithaca®
brands. TransAct has sold over 3.9 million printers, terminals and
other hardware devices around the world and is committed to
providing world-class service, spare parts, and accessories to
support its installed product base. Through the TransAct Services
Group, the Company also provides customers with a complete range of
supplies and consumable items both online at
http://www.transactsupplies.com and through its direct sales team.
TransAct is headquartered in Hamden, CT. For more information,
please visit http://www.transact-tech.com or call (203)
859-6800.
©2024 TRANSACT Technologies Incorporated. All rights reserved.
TransAct®, BOHA!™, AccuDate™, Epic Edge®, EPICENTRAL® and Ithaca®
are trademarks of TransAct Technologies Incorporated.
Cautionary Statement Regarding Preliminary Financial
Information
The Company has prepared the preliminary financial information
set forth below on a materially consistent basis with its
historical financial information and in good faith based upon its
internal reporting as of and for the three months ended March 31,
2024. This financial information is preliminary and is thus
inherently uncertain and subject to change as the Company finalizes
its financial results and related review for the three months ended
March 31, 2024. During the course of the preparation of the
Company’s consolidated financial statements and related notes as of
and for the three months ended March 31, 2024, the Company may
identify items that could cause its final reported results to be
materially different from the preliminary financial information set
forth above. As a result, there can be no assurance that the
Company’s final results for this period will not differ from the
preliminary financial information.
This preliminary financial information should not be viewed as a
substitute for full financial statements prepared in accordance
with GAAP. In addition, this preliminary financial information is
not necessarily indicative of the results to be achieved for any
future period.
Forward-Looking Statements
Certain statements included in this press release may be
forward-looking statements within the meaning of the U.S. federal
securities laws, including the Private Securities Litigation Reform
Act of 1995. Forward-looking statements are any statements other
than statements of historical fact. Forward-looking statements
represent current views about possible future events and are often
identified by the use of forward-looking terminology, such as
"may", "will", "could", "expect", "intend", "estimate",
"anticipate", "believe", "project”, "plan”, "predict”, "design" or
"continue", or the negative thereof, or other similar words.
Forward-looking statements are subject to certain risks,
uncertainties and assumptions. In the event that one or more of
such risks or uncertainties materialize, or one or more underlying
assumptions prove incorrect, actual results may differ materially
from those expressed or implied by the forward-looking statements.
Important factors and uncertainties that could cause actual results
to differ materially from those expressed or implied by the
forward-looking statements include, but are not limited to, the
following: the adverse effects of current economic conditions on
our business, operations, financial condition, results of
operations and capital resources, difficulties or delays in
manufacturing or delivery of inventory or other supply chain
disruptions, inflation and the Russia/Ukraine and Middle East
conflicts, an inability of our customers to make payments on time
or at all, diversion of management attention, a possible future
reduction in the value of goodwill or other intangible assets,
inadequate manufacturing capacity or a shortfall or excess of
inventory as a result of difficulty in predicting manufacturing
requirements due to volatile economic conditions, price increases
or decreased availability of component parts or raw materials,
exchange rate fluctuations, volatility of and decreases in trading
prices of our common stock and the availability of needed financing
on acceptable terms or at all; our ability to successfully develop
new products that garner customer acceptance and generate sales,
both domestically and internationally, in the face of substantial
competition; our reliance on an unrelated third party to develop,
maintain and host certain web-based food service application
software and develop and maintain selected components of our
downloadable software applications pursuant to a non-exclusive
license agreement, and the risk that interruptions in our
relationship with that third party could materially impair our
ability to provide services to our food service technology
customers on a timely basis or at all and could require substantial
expenditures to find or develop alternative software products; our
ability to successfully grow our business in the food service
technology market; risks associated with the pursuit of strategic
initiatives and business growth; general economic conditions; our
dependence on contract manufacturers for the assembly of a large
portion of our products in Asia; our dependence on significant
suppliers; our ability to recruit and retain quality employees; our
dependence on third parties for sales outside the United States;
marketplace acceptance of new products; risks associated with
foreign operations; the availability of third-party components at
reasonable prices; price wars, supply chain disruptions or other
significant pricing pressures affecting the Company’s products in
the United States or abroad; increased product costs or reduced
customer demand for our products due to changes in U.S. policy that
may result in trade wars or tariffs; our ability to protect
intellectual property; and other risk factors identified and
discussed in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2023, and other reports filed with the
Securities and Exchange Commission. We caution readers not to place
undue reliance on forward-looking statements, which speak only as
of the date of this release. We undertake no obligation to publicly
or otherwise revise any forward-looking statements, whether as a
result of new information, future events or other factors, except
where we are expressly required to do so by applicable law.
- Financial tables follow-
TRANSACT TECHNOLOGIES
INCORPORATED
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Preliminary and
Unaudited)
Three months ended March 31,
2024
2023
(In thousands, except per share
data)
Net sales
$10,687
$22,270
Cost of sales
5,063
10,015
Gross profit
5,624
12,255
Operating expenses:
Engineering, design and product
development
1,966
2,269
Selling and marketing
2,083
2,757
General and administrative
2,876
3,416
6,925
8,442
Operating (loss) income
(1,301)
3,813
Interest and other income (expense):
Interest, net
48
(66)
Other, net
(60)
21
(12)
(45)
(Loss) income before income taxes
(1,313)
3,768
Income tax benefit (expense)
277
(629)
Net (loss) income
$(1,036)
$3,139
Net (loss) income per common share:
Basic
$(0.10)
$0.32
Diluted
$(0.10)
$0.31
Shares used in per share calculation:
Basic
9,972
9,930
Diluted
9,972
10,043
SUPPLEMENTAL INFORMATION –
SALES BY MARKET:
(Preliminary and
Unaudited)
Three months ended March 31,
2024
2023
(In thousands)
Food service technology
$3,300
$3,458
POS automation
651
1,797
Casino and gaming
5,696
15,811
TransAct Services Group
1,040
1,204
Total net sales
$10,687
$22,270
TRANSACT TECHNOLOGIES
INCORPORATED
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Preliminary and
Unaudited)
March 31,
December 31,
2024
2023
Assets:
(In thousands)
Current assets:
Cash and cash equivalents
$10,631
$12,321
Accounts receivable, net
7,780
9,824
Inventories
19,171
17,759
Prepaid income taxes
352
322
Other current assets
931
773
Total current assets
38,865
40,999
Fixed assets, net
2,187
2,421
Right-of-use assets
1,371
1,602
Goodwill
2,621
2,621
Deferred tax assets
6,691
6,304
Intangible assets, net
50
88
Other assets
133
163
13,053
13,199
Total assets
$51,918
$54,198
Liabilities and Shareholders’
Equity:
Current liabilities:
Revolving loan payable
$2,250
$2,250
Accounts payable
$4,226
4,431
Accrued liabilities
4,126
4,947
Lease liabilities
941
929
Deferred revenue
925
1,079
Total current liabilities
12,468
13,636
Deferred revenue, net of current
portion
196
209
Lease liabilities, net of current
portion
468
720
Other liabilities
215
219
879
1,148
Total liabilities
13,347
14,784
Shareholders’ equity:
Common stock
140
140
Additional paid-in capital
57,249
57,055
Retained earnings
13,342
14,378
Accumulated other comprehensive loss, net
of tax
(50)
(49)
Treasury stock, at cost
(32,110)
(32,110)
Total shareholders’ equity
38,571
39,414
Total liabilities and shareholders’
equity
$51,918
$54,198
TRANSACT TECHNOLOGIES
INCORPORATED
RECONCILIATION OF NET (LOSS)
INCOME TO EBITDA AND ADJUSTED EBITDA
NON-GAAP FINANCIAL
MEASURES
(Preliminary and
Unaudited)
Three Months Ended
March 31,
2024
2023
(In thousands)
Net (loss) income
$(1,036)
$3,139
Interest (income) expense, net
(48)
66
Income tax (benefit) expense
(277)
629
Depreciation and amortization
395
352
EBITDA
(966)
4,186
Share-based compensation expense
265
278
Adjusted EBITDA
$(701)
$4,464
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507407784/en/
Investor Contact: Ryan Gardella ICR, Inc.
Ryan.Gardella@icrinc.com
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